Like private development, public projects must frequently obtain and comply with a variety of state and federal regulatory permits. Too often developers, under pressure to complete projects as soon as possible, rush through the regulatory approval process and spend more time, effort and money on environmental mitigation than necessary. Public agencies sometimes fall into the same trap: Moving through the process with an eye on getting a new park, water pipeline or city hall built without an early focus on selecting and designing cost-effective options to mitigate impacts to endangered species, creeks and other natural resources. This lack of focus can haunt a public project when mitigation comes due.

A shortsighted view of this aspect of the planning process can contribute to increased “mitigation ratios,” costly mitigation endowments and project delays. However, when public agencies engage in the process early they may be rewarded with more flexible and less costly mitigation. In fact, one of the key agencies that oversees mitigation regulations in California and the rest of the country has recently, for the first time, provided specific public guidance as to how it determines the amount of mitigation it will require and how “mitigation ratios” are calculated.

Public agencies are well served to give mitigation obligations the same attention as the project itself. Here are four steps that can help achieve this goal and save your agency and staff some trouble.

Step 1: Understand Project Impacts.
Become keenly aware of existing conditions on your project site early on. This can be accomplished with the help of staff, public natural resource agencies, consultants or others. A proper baseline analysis of natural resource conditions on site, including vegetation mapping, species surveys and understanding which agencies regulate the area can help explain the resource impacts your project is likely to create.

Avoid impacts to waterways and other natural resources if you can. A slight reconfiguration of your project, even if inconvenient from a design or engineering perspective, could save significant mitigation dollars in the long run. If project impacts to waters and species cannot be fully avoided, staff and consultants should evaluate mitigation options extensively before permit applications are even submitted to the regulatory agencies.

- “Section 401” water quality standards certifications, waste discharge requirements, “NPDES” or other permits designed to protect water quality (regional water quality control boards).

- Fish and Game Code “Section 1600” (streambed alteration) or incidental take permits (state endangered species protection) issued by the California Department of Fish and Wildlife.

- Biological opinions or incidental take permits to protect federally listed species (United States Fish and Wildlife Service).

Each of these agency permitting documents generally has different requirements. What they have in common, however, is that permit conditions have typically become more stringent in the last 15 years or so, and continue to become more daunting as time goes on. Common high dollar items may include mitigation performance bonds, establishing buffer zones around the project site, drafting extensive mitigation plans, installing detention basins or other water quality measures, restoring habitat, permanently protecting land on or off site, establishing conservation easements, funding endowments for the long-term management of conserved sites, or purchasing credits in a mitigation bank or in lieu fee program.

In most cases, the laws that apply will allow a project proponent to undertake its own mitigation, hire an expert such as a resource conservation district, land trust or consultant to assist, or legally transfer the mitigation responsibility to a third party such as a mitigation bank or in lieu fee program. However, there are pros and cons to each of these options, depending upon the circumstances of your project. This is why there is a need to be prepared.

The regulatory agencies also have differing views on mitigation ratios. An instructive document recently circulated by the South Pacific Division of the Army Corps is the “Standard Operating Procedure for Determination of Mitigation Ratios. The document reveals a checklist of how mitigation ratios are typically calculated by that agency. Notably, the time lag between when project impacts occur (e.g., at time of site grading) and when replacement habitat is fully functioning (i.e., when restoration “success criteria” are proposed to be satisfied) can have a significant impact on the mitigation ratio.

Step 3: Propose Mitigation.
In many instances, public agency project proponents will submit permit applications to the regulatory agencies offering either no mitigation at all or unreasonably low mitigation. Whether this negotiation tactic will work can be debated. However, going this route is frequently disadvantageous. Agency project managers review mitigation proposals every day. They have a good idea of what is generally acceptable and what is not. Offering little or no mitigation is viewed by many regulators like denying that your project is affecting natural resources at all. This is not an offer they ordinarily expect or respect. (If your project really has no impacts, you don’t need permits to begin with.) Agency project managers are unlikely to buy off on minor or no mitigation without solid baseline information. The agencies may also return permit applications as incomplete or put them on the bottom of the pile of what can already be a long process. Worse, offering no or limited mitigation leaves agency personnel to devise their own mitigation for your project. Generally, it is better to have a hand in your own mitigation requirement than leaving it to a regulator.

Before proposing mitigation, project proponents should ask themselves: How much mitigation is needed for this project? What type(s) of mitigation will be acceptable? Who should implement the mitigation? Is it more cost effective for the agency to conduct the mitigation itself, or hand it off to a third party? Is the agency prepared to fund an endowment? Is there a way to split any duties associated with installation mitigation or managing it for the long-term? Can I design a mitigation project that will satisfy all of my permit obligations at one site or with a single conservation project? Is there a public relations benefit (or not) for the project proponent to conduct the mitigation itself?

Step 4: Negotiate.
As long as you are putting forth a reasonable proposal, there is no reason not to negotiate with the agencies. Most importantly, understand all your options before talking with them. Those who are prepared have a distinct advantage over those who are not. And, don’t sign your permits without first reading and fully understanding their requirements and conditions. Also, be aware that your own agency’s (and even your consultants’) reputations may have some bearing on the way your proposals are received by the agency. Remember to take the long-view: this may not be the last time you have to work with the regulatory agency on one of your projects, so don’t burn a bridge if you can help it.

Take Away.
Give mitigation requirements the same attention you bestow to the project itself. This approach will allow public agencies to decide on a cost-effective mitigation strategy early in the planning process and avoid unwelcome headaches and delays.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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